Critics of the Homestead detention center for unaccompanied migrant children have hung signs in the trees expressing their contempt for the camp’s mission. They’ve chanted slogans. One artist projected the words “shut it down” on an exterior fence with beams of light.
Despite their condemnation, the camp has grown.
Another tactic, one borrowed from those who object to private prisons in general, is starting to emerge. Foes of the facility want to shame financial backers into withholding credit.
In recent months a handful of big banks, including Wells Fargo and JPMorgan Chase, have indicated they plan to transition out of the business of financing companies that run private prisons.
An exception is Bank of America. According to documents filed in August with the Securities and Exchange Commission, Bank of America provided a $380 million loan for Caliburn, the company that runs the Homestead center under a U.S. government contract, as well as a $75 million revolving credit line, records show.
The Homestead center is not a prison, although protesters say it functions as one. The minors held inside are not allowed to leave. As the Trump administration’s anti-immigration rhetoric has intensified, activists and research groups have directed their ire toward the “morally bankrupt industry” that they say “profits from caging people.”
They are ramping up their rhetoric toward the financial sector.
“Communities nationwide are rising up against corporate backers of hate that are financing private detention,” said Javier H. Valdés, co-executive director of Make the Road New York, an immigrant rights group. “Companies with financial entanglements with the private prison industry are on notice and should swiftly end those relationships.”
Financial documents show that Bank of America continues to be the chief financier of Caliburn, the Homestead center’s operator. Formally known as the Homestead Temporary Shelter for Unaccompanied Children and actually located outside the Homestead city limits, it is the only facility of its kind in the United States that’s operated by a for-profit corporation.
It was in March when Wells Fargo and JPMorgan Chase announced they would severe ties with the private prison industry — specifically GEO Group and CoreCivic, the largest operators of private prisons and detention centers in the country — because it was a “risk” to their business.
“Wells Fargo made the risk-based business decision to exit banking relationships with private prison companies when our contracts with those companies expire,” the bank said in a statement. “We have steadily reduced our exposure and will not provide any additional financing for existing customers or add any additional private prison customers.”
JPMorgan Chase said it has “a robust and well established process to evaluate the sectors that we serve. As part of this process, we will no longer bank the private prison industry.”
A spokeswoman for Bank of America told the Miami Herald that the bank would not comment on whether it will make a similar decision. Caliburn also declined to comment.
Joshua Rubin — a watchdog and activist who has spearheaded numerous protests in Homestead and in Tornillo, Texas, where migrant children were housed in a tent city — told the Herald that banks “need to recognize that people don’t want their money used this way.”
“It’s dirty,” Rubin said. “They need to realize that they work for us. The banks are providing us a service, and for that service, we pay fees. Then, they invest our money into immoral practices like the incarceration of migrant children. Though it’s not easy, I have to state that the only way to stop this, if banks don’t choose to do the right thing, would be to get rid of our accounts, divest. We should get out.”
SEC filings show Bank of America is listed as Caliburn’s administrative agent, meaning Bank of America is key in representing any other possible lenders and administering any credit agreements.
A host of both big and small banks still provide more than $2.6 billion in credit to the industry, according to a recent report released by three research watchdog groups: In The Public Interest, Public Accountability Initiative and the Center for Popular Democracy.
One of them is SunTrust.
SunTrust would not comment on whether it will continue financing the private prison industry but said “it has relationships with a wide variety of corporate clients, and we review those relationships thoughtfully. It brings many perspectives to full consideration of all factors including legality, creditworthiness, policy views, emerging issues and reputational risks. For any relationship, you can be certain that all views are taken into account.”
Kevin Connor, director of the Public Accountability Initiative, a watchdog research group that recently co-published a data briefing titled “The Wall Street banks still financing private prisons” said “once a bank is in one of these agreements it’s very hard for them to break out of them until it’s time to renegotiate the terms or end the agreement.”
“Questions like ‘Who’s financing these types of facilities?’ [are] starting to come on the radar,” Connor said. “People haven’t linked Caliburn to private prisons yet. But as scrutiny of Caliburn intensifies, banks’ lending arrangements with Caliburn will also be challenged as a result of that drawn scrutiny.”
Caliburn already drew increasing scrutiny last month when it was announced that John Kelly, former head of the Department of Health and Human Services and former chief of staff for President Donald Trump, had joined the board of advisers of the company. Critics noted that he would now be profiting from a policy that he helped the president shape and carry out.
HOW IT WORKS
Banking giants like Bank of America provide loans and other financing agreements that keep the private prison and detention industry rolling.
Private prison and detention operators depend on the banks for debt financing — in the form of loans, bond debt and credit — to support their day-to-day operations while securing additional government contracts. Then those contracts are used to pay off the banks.
As a result, the banking institutions receive millions of dollars in interest and fees from the facilities.
The Miami Herald reported recently that the U.S. Department of Health and Human Services had awarded Caliburn’s subsidiary a no-bid $341 million contract.
In risk-disclosure statements filed by the GEO Group last month, the company describes how community outcry over private detention could impact business.
“Public resistance to the use of public-private partnerships for correctional, detention and community-based facilities could result in our inability to obtain new contracts or the loss of existing contracts, impact our ability to obtain or refinance debt financing or enter into commercial arrangements, which could have a material adverse effect on our business, financial condition and results of operations,” GEO Group wrote.
Up until March, Caliburn had planned to sell up to $100 million in an initial public stock offering. However, the company abruptly pulled out amid controversy over the administration’s immigration policies, Caliburn announced.
Those initial public offering records show Bank of America was positioned to hold a key spot among four other underwriters for Caliburn, which means it would have been a major participant in marketing the stock offering to investors, and would have earned substantial fees.
Since the SEC documents were filed, there has been significant expansion at the Homestead shelter, including the addition of more than 2,000 beds. Whether Caliburn has secured additional financing from Bank of America to support that growth is not known because those financial records aren’t public.